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Friday
Nov 02 2001
| Updated
0007 hrs IST
1337 EST
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Gail to approach DPC for due diligence of LNG terminal
MUMBAI
GAS Authority of India will formally approach energy major Enron India for conducting a due diligence exercise to possibly buy the Dabhol Power Company's $800-million liquified natrual gas terminal in Maharashtra.
"Gail has appointed KPMG as consultants for studying the buy-out prospects and has also confirmed its interest in the five million tonne LNG terminal to Industrial Development Bank of India", financial institution sources said .
Gail chairman and managing director Proshanto Banerjee confirmed the development but declined to provide any further details.
However, DPC spokesperson said the US energy major's proposal to the Centre for equity buy-out pertained to the entire 2,814 mw power plant facility, of which the LNG terminal is a part.
"Any related discussions would need to cover the composite project", he said.
Sources said Gail and its partner in the scrapped Indigas LNG terminal project, Tata Power Company, are planning to extend their partnership for a separate buy-out of the energy major's terminal.
"Gail will handle the entire LNG terminal leaving the running of the power plant to the Tata's, if the Mumbai-based utility takes over the project," they added.
In their road-map for revival of the $3-billion project, the Indian FIs led by IDBI had suggested Gail takeover Enron's LNG import and re-gassification facilities in Maharashtra as part of the revival package.
DPC's LNG facility was designed to supply 2.8 million tonnes to the plant, while the balance was to be sold to other bulk consumers.
Sources said Gail had also sought information on the LNG facility from the Maharashtra government and DPC's estranged partner MSEB.
On October 22, Banerjee met chief minister Vilasrao Deshmukh to discuss the LNG import facility. He has also sought local levies on LNG at par with naphtha, LPG and propane.
Gail has also lined up plans to import natural gas from the middle-eastern countries for Petronet LNG's five million tonne Dahej terminal and at Dabhol, if its deal with Enron gets through, sources added.
Gail's partnership with Tata's for DPC's facility make sense as they have already scrapped Indigas' Trombay terminal, a Rs 2,400 crore joint venture project in association with French energy major Totalfina Elf.
Indigas was supposed to sign long term LNG contracts with Yemen Gas or Qatar Gas in the middle east and was studying the feasibility of transporting LNG on a free-on-board basis.
The company was to commence supply to its main customer Tata Power by end 2004 and already had locational clearances from Maharashtra government in place. (PTI)
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